Evening Standard comment: Chinese visitors and investment welcome

We welcome Chinese visitors, talent and investment. But to convince them that we mean it, ministers need to be more consistent — and open — about the benefits of migration

Monday 14 October 2013 11:06 BST

George Osborne’s announcement today in China of a new visa system for Chinese visitors marks a victory for this paper and for the West End businesses who have campaigned for reform. Until now, Chinese nationals have had to complete lengthy forms separate from those used for visa applications to the Schengen group of EU countries. There is mounting evidence that this is discouraging high-spending Chinese visitors. So today the Chancellor announces plans to allow some visitors to get UK visas at the same time as Schengen ones, as well as for a 24-hour priority visa service aimed at business people.

This is a welcome change of heart. We should be open to visitors and immigrant talent, and to investment, the other main focus of Mr Osborne’s visit. The Chancellor has said that we should not be afraid of Chinese investment: London never was. But there may be more reticence elsewhere in the country — likewise over immigration. And it is here that there is a disconnect between Mr Osborne’s message and that of ministers for consumption at home.

The latest Immigration Bill is a shameless appeal to voters concerned about immigration (especially ones defecting to Ukip). We need effective immigration controls. But if the rhetoric surrounding them — picked up abroad, of course —discourages hard-working immigrants and foreign students, it becomes a self-defeating exercise. London understands better than anywhere else in the UK the importance of being open to the world. We welcome Chinese visitors, talent and investment. But to convince them that we mean it, ministers need to be more consistent — and open — about the benefits of migration.

Tax and living costs

The heightened importance on the political agenda of the cost of living is one factor behind new income tax proposals being considered by senior Conservatives. The idea is to raise the starting rate of income tax to £12,500. Already the Coalition has raised the income tax threshold, a Liberal-Democrat demand: it will have risen to £10,000 by next year. The principle is sound, helping make work pay for the lowest-paid workers. Whether it will work politically as a counter to Labour’s pledge of a cap on energy prices is less certain — as indeed is whether either proposal will make much difference to the cost of living.

This is because while real prices of both food and consumer durables have fallen steadily in recent years, housing costs have shot up. This is highlighted by a report from the New Policy Institute think tank, which warns that the capital’s high housing costs are the key factor causing poverty in London. London faces particular challenges in this regard: there is a strong case for the London Living Wage, pegged higher than the national minimum wage. Nevertheless, the answer to higher housing costs, both in London and elsewhere, is more house-building to increase supply. A lower starting rate of income tax is welcome if it is affordable — but more homes will ultimately do more to drive down people’s living costs.

Silicon city

IT is a measure of the growing power of London as tech centre that New York Mayor Michael Bloomberg admits we are a competitor. Old Street’s Silicon Roundabout, he has conceded, is threatening New York’s own efforts to take on California’s Silicon Valley. The capital is indeed emerging as a major global force in the tech industries — an example of our city’s endless re-invention of itself. So we welcome New York’s challenge, its talent — and indeed its Mayor, the next chairman of the Serpentine Gallery.